Advanced Micro Devices AMD shares have soared 31.4% in the past month, outperforming the Zacks Computer and Technology sector’s increase of 19.4% and the Zacks Computer – Integrated Systems industry’s growth of 22.5%.

The outperformance can be attributed to AMD’s expanding portfolio, accretive acquisitions and rich partner base. 

The strong adoption of fifth-gen EPYC Turin processors and expanding Instinct AI accelerator deployments across hyperscalers and enterprises have also been major growth drivers for its success.

So, how should you play the AMD stock now? Let’s dig deep to find out.

AMD's One Month PerformanceZacks Investment Research

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AMD’s Expanding Portfolio Aids Prospect

AMD’s expanding EPYC portfolio has been noteworthy. In April 2025, AMD announced that Alphabet's GOOGL cloud computing platform, Google Cloud, has introduced new C4D and H4D virtual machines powered by 5th Gen AMD EPYC processors. 

Alphabet’s Google Cloud’s C4D instances deliver up to 80% higher throughput per vCPU, while Google Cloud’s H4D VMs offer scalable performance for HPC workloads with Cloud RDMA. These advancements underscore Google Cloud’s commitment to leveraging AMD’s Zen 5 architecture for enhanced cloud computing capabilities.

AMD’s expanding portfolio in the embedded market has been a key catalyst for growth. In the first quarter of 2025, AMD introduced the EPYC Embedded 9005 Series processors, offering server-grade performance and energy efficiency, along with purpose-built features tailored for the networking, storage, and industrial edge markets.

Rich Partner Base & Acquisitions to Boost AMD’s Prospects

A rich partner base that includes Alphabet, Oracle ORCL, Meta Platforms, Dell Technologies, Cisco Systems, Jio Platforms, Nokia and IBM has been playing a key part in expanding AMD’s footprint.

In the first quarter of 2025, leading hyperscalers, including Oracle Cloud Infrastructure and Google Cloud, expanded their use of AMD EPYC CPUs. AMD announced that its 5th Gen AMD EPYC processors now power Oracle Cloud Infrastructure Compute E6 Standard shapes. Oracle utilizes these processors to deliver up to 2X the performance of the previous generation at the same cost.

AMD expanded its partnership with Dell Technologies to deliver advanced AI solutions and enhance infrastructure. In the reported quarter, AMD announced its collaboration with Dell Technologies to deliver AI-ready solutions for the telecom industry, featuring the Instinct MI300X accelerator to power scalable, high-performance network infrastructures.

AMD is also benefiting from accretive acquisitions to strengthen its AI ecosystem and bridge the technological gap with NVIDIA NVDA in the race for AI dominance. Exiting first-quarter 2025, AMD completed its acquisition of ZT Systems, combining its leadership in systems and racks with AMD’s powerful GPUs, CPUs, networking silicon, and open-source software to tap into the $500 billion data center AI accelerator market by 2028.

Story Continues

AMD’s Q2 Guidance Unimpressive

Despite an expanding portfolio and a rich partner base, AMD is expected to be hurt by export restrictions on GPUs to China, which will be a headwind and stiff competition from NVIDIA.

AMD expects second-quarter 2025 revenues of $7.4 billion (+/-$300 million). At the mid-point of the revenue range, this represents year-over-year growth of approximately 27%. AMD expects approximately $700 million reduction in second-quarter 2025 revenues due to halted MI308X shipments to China.

AMD’s Earnings Estimates Trend Downward

The Zacks Consensus Estimate for AMD’s second-quarter 2025 earnings is currently pegged at 65 cents per share, which has decreased 35% over the past 30 days, indicating a year-over-year decline of 5.80%.

The consensus mark for second-quarter 2025 revenues is pegged at $7.41 billion, indicating year-over-year growth of 26.99%.

Advanced Micro Devices, Inc. Price and ConsensusAdvanced Micro Devices, Inc. Price and Consensus

Advanced Micro Devices, Inc. price-consensus-chart | Advanced Micro Devices, Inc. Quote

AMD beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 2.30%.

AMD Stock Overvalued

AMD stock is currently overvalued, as the Value Score of D suggests a stretched valuation at this moment.

The stock is trading at a premium, with a forward 12-month Price/Sales of 5.53X compared with the industry’s 3.31X.

Price/Sales (F12M)Zacks Investment Research

Image Source: Zacks Investment Research

Conclusion: Hold AMD Stock for Now

AMD’s expanding portfolio, strategic acquisitions and rich partner base are expected to improve its top-line growth.

However, its near-term prospects are dull due to macroeconomic uncertainties and stiff competition, particularly from NVIDIA in the cloud data center and AI chip markets. The growing demand for custom AI chips, offered by companies like Broadcom, is increasing concerns over market share. Stretched valuation also remains a concern. 

AMD currently has a Zacks Rank #3 (Hold), suggesting that it may be wise for investors to wait for a more favorable entry point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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